U.S.
SECURITIES AND EXCHANGE COMMISSION
 Washington,
D.C. 20549
 FORM
10-Q
 
 x QUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934
 
 For the
quarterly period ended: September 30, 2009
 
 o TRANSITION REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934
 
 Commission
file number:000-53326
 
 DRC VENTURES,
INC.
 (Exact
name of registrant as specified in its charter)
 
 Nevada
              26-2423443(State
      or other jurisdiction of incorporation or organization)
              (I.R.S.
      Employer Identification No.)
 
 86 South Centre Avenue,
Rockville Centre, NY 11570
 (Address
of principal executive offices)
 
 (516)
594-4401
 (Issuer's
telephone number)
 
 
 (Former
name, former address and former
 fiscal
year, if changed since last report)
 
 Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. x  Yes   o  No
 
 Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such
files).
 o Yes  o No
 
 Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.
 
 Large
      accelerated filer   o
              Accelerated
      filer     oNon-accelerated
      filer     o  (Do
      not check if a smaller reporting company)
              Smaller
      reporting company     x
 
 Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). xYes oNo
 
 APPLICABLE
ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
 PROCEEDINGS
DURING THE PRECEDING FIVE YEARS
 
 Indicate
by check mark whether the registrant has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act
of 1934 subsequent to the distribution of securities under a plan confirmed by a
court. o Yes  
o No
 
 
 
 APPLICABLE
ONLY TO CORPORATE ISSUERS
 
 State the
number of shares outstanding of each of the issuer's classes of common equity,
as of the latest practicable date:  At November 12, 2009 there were
1,000,000 shares of common stock outstanding.
 
 1
 
 
 PART
I — FINANCIAL INFORMATION
 
 Item 1.
Financial Statements.
 
 
 PageBalance
      Sheet as of September 30, 2009 (Unaudited)
              
              
              F-1Statement
      of Operations for the three months ended September 30, 2009
                (Unaudited)
      and since inception (April  15, 2008)
(Unaudited)
              
              
              F-2Statement
      of Stockholders Deficit
              
              
              F-3Statement
      of Cash Flows for the three and nine months ended September
                30,
      2009 (Unaudited) and Since inception (April 15, 2008)
      (Unaudited)
              
              
              F-4Notes
      to Financial Statements (Unaudited)
              
              
              F-5
  2
 
  DRC Ventures, Inc.Balance
      Sheet(A
      Development Stage Company)
  As
      ofSeptember
      30, 2009
                  
                  
                  June
      30, 2009(unaudited)
                  
                  
                  (audited)ASSETSCURRENT
      ASSETSCash
                  
                  $
                  508
                  
                  
                  $
                  520TOTAL
      CURRENT ASSETS
                  
                  
                  508
                  
                  
                  
                  520TOTAL
      ASSETS
                  
                  
                  508
                  
                  
                  
                  520LIABILITIES AND
      STOCKHOLDERS' DEFICITLIABILITIESCURRENT
      LIABILITIESShareholder
      Loan
                  
                  $
                  12,435
                  
                  
                  $
                  12,435Accrued
      Expenses
                  
                  
                  1,270
                  
                  
                  
                  1,043TOTAL
      CURRENT LIABILITIES
                  
                  
                  13,705
                  
                  
                  
                  13,478TOTAL
      LIABILITIES
                  
                  
                  13,705
                  
                  
                  
                  13,478STOCKHOLDERS'
      DEFICITPreferred
      stock ($0.0001 par value; 10,000,000 shares authorized;none
      issued and outstanding)
                  
                  
                  -
                  
                  
                  
                  -Common
      stock ($0.0001 par value; 100,000,000 shares authorized;1,000,000
      shares issued and outstanding)
                  
                  
                  100
                  
                  
                  
                  100Stock
      Subscription Receivable
                  
                  
                  (100
                  )
                  
                  
                  (100
                  )Retained
      Deficit
                  
                  
                  (13,197
                  )
                  
                  
                  (12,958
                  )TOTAL
      STOCKHOLDERS' DEFICIT
                  
                  
                  (13,197
                  )
                  
                  
                  (12,958
                  )TOTAL
      LIABILITIES AND STOCKHOLDERS' DEFICIT
                  
                  $
                  508
                  
                  
                  $
                  520
 
 The
accompanying notes are an integral part of these financial
statements.
 
 F-1
 
 DRC
      Ventures, Inc.(A
      Development Stage Company)Statement
      of Operations (unaudited)
  CumulativeFor
      the three months ended
                  
                  
                  SinceSeptember
      30,
                  
                  
                  September30,
                  
                  
                  Inception2009
                  
                  
                  2008
                  
                  
                  April 15, 2008REVENUES:Income
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -Total
      Revenue
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -EXPENSES:Professional
      Fees
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  10,995Selling,
      General, and Administrative
                  
                  
                  12
                  
                  
                  
                  -
                  
                  
                  
                  932Total
      Expenses
                  
                  
                  12
                  
                  
                  
                  -
                  
                  
                  
                  11,927OTHER
      INCOME/(EXPENSE)Interest
      Expense
                  
                  $
                  (227
                  )
                  
                  $
                  (200
                  )
                  
                  $
                  (1,270
                  )NET
      OTHER INCOME/(EXPENSE)
                  
                  
                  (227
                  )
                  
                  
                  (200
                  )
                  
                  
                  (1,270
                  )NET
      LOSS
                  
                  $
                  (239
                  )
                  
                  $
                  (200
                  )
                  
                  $
                  (13,197
                  )Basic
      and fully diluted net loss per common share:
                  
                  $
                  (0.00
                  )
                  
                  $
                  (0.00
                  )
                  
                  $
                  (0.01
                  )Weighted
      average common shares outstanding
                  
                  
                  1,000,000
                  
                  
                  
                  1,000,000
                  
                  
                  
                  1,000,000
  The
accompanying notes are an integral part of these financial
statements.
 
 F-2
  DRC Ventures, Inc.Statement
      of Stockholders' Deficit (unaudited)(A
      Development Stage Company)
  AdditionalCommon
      Stock
                  
                  
                  Preferred
      stock
                  
                  
                  Paid-in
                  
                  
                  DeficitShares
                  
                  
                  Amount
                  
                  
                  Shares
                  
                  
                  Amount
                  
                  
                  Capital
                  
                  
                  AccumulatedBalances,
      June 30, 2008
                  
                  
                  -
                  
                  
                  $
                  -
                  
                  
                  
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  (9,195
                  )Net
      income/(loss) for the year
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (3,763
                  )Issuance
      of common shares
                  
                  
                  1,000,000
                  
                  
                  
                  100
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Balances,
      June 30, 2009
                  
                  
                  1,000,000
                  
                  
                  $
                  100
                  
                  
                  
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  (12,958
                  )Net
      income/(loss) for the quarter
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (239
                  )Balances,
      September 30, 2009
                  
                  
                  1,000,000
                  
                  
                  $
                  100
                  
                  
                  
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  (13,197
                  )
  The
accompanying notes are an integral part of these financial
statements.
 
 F-3
  DRC Ventures, Inc.(A
      Development Stage Company)Statement
      of Cash Flows (unaudited)
  CumulativeFor
      the three months
                  
                  
                  TotalsEnded
                  
                  
                  SinceSeptember
      30,
                  
                  
                  September
      30,
                  
                  
                  Inception2009
                  
                  
                  2008
                  
                  
                  April 15, 2008CASH FLOWS FROM
      OPERATING ACTIVITIESNet
      loss
                  
                  $
                  (239
                  )
                  
                  $
                  (200
                  )
                  
                  $
                  (13,197
                  )Adjustments
      to reconcile net (loss) to net cash usedin
      operations:Changes
      in Assets and Liabilities:(Increase)/Decrease
      in Accrued Expenses
                  
                  
                  227
                  
                  
                  
                  200
                  
                  
                  
                  1,270NET
      CASH PROVIDED BY (USED IN)  OPERATING ACTIVITIES
                  
                  
                  (12
                  )
                  
                  
                  -
                  
                  
                  
                  (11,927
                  )CASH FLOWS FROM
      INVESTING ACTIVITIES:Note
      Payable to Related Party
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  12,435NET
      CASH PROVIDED BY (USED IN)  INVESTING ACTIVITIES
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  12,435CASH
      AND CASH EQUIVALENTS, BEGINNING OF THE YEAR
                  
                  
                  520
                  
                  
                  
                  5
                  
                  
                  
                  -CASH
      AND CASH EQUIVALENTS, END OF THE YEAR
                  
                  $
                  508
                  
                  
                  $
                  5
                  
                  
                  $
                  508
  The
accompanying notes are an integral part of these financial
statements.
  F-4
 
  DRC
      VENTURES, INC.
                        NOTES
      TO THE UNAUDITED FINANCIAL STATEMENTS
                        AS
      OF SEPTEMBER 30, 2009
  NOTE A- SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES
 
 Business Activity-
DRC Ventures, Inc. (the "Company”) was organized under the laws of the State of
Nevada on April 15, 2008 as a corporation with a year end of June 30. The
Company’s objective is to acquire or merge with a target business or company in
a business combination.
 
 Basis of
Presentation- The financial statements included herein were prepared
under the accrual basis of accounting.
 
 Cash and Cash
Equivalents- For purposes of the Statement of Cash Flows, the Company
considers liquid investments with an original maturity of three months or less
to be cash equivalents.
 
 Management’s Use of
Estimates- The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosures of contingent assets and
liabilities at the date of financial statements and the reported amounts of
revenue and expenses during the reporting period. Actual results could differ
from those estimates. The financial statements above reflect all of the costs of
doing business.
 
 Revenue Recognition-
The Company’s policy is to recognize income when it is earned.
 
 Comprehensive Income
(Loss)- The Company adopted Financial Accounting Standards Board
Statement of Financial Accounting Standards (SFAS) No. 130, “Reporting Comprehensive
Income” which establishes standards for the reporting and display of
comprehensive income and its components in the financial statements. There were
no items of comprehensive income (loss) applicable to the Company during the
period covered in the financial statements.
 
 Net Income per Common
Share- Statement of Financial Accounting Standards (SFAS) No. 128
requires dual presentation of basic and diluted earnings per share (EPS) with a
reconciliation of the numerator and denominator of the EPS computations. Basic
earnings per share amounts are based on the weighted average shares of common
stock outstanding. If applicable, diluted earnings per share would assume the
conversion, exercise or issuance of all potential common stock instruments such
as option, warrants and convertible securities, unless the effect is to reduce a
loss or increase earnings per share. Accordingly, this presentation has been
adopted for the period presented. There were no adjustments required to net
income for the period presented in the computation of diluted earnings per
share.
 
 Deferred Taxes-
Income taxes are provided in accordance with Statement of Financial Accounting
Standards (SFAS) No. 109, “Accounting for Income
Taxes”. A deferred tax asset or liability is recorded for all temporary
differences between financial and tax reporting and net operating loss-carry
forwards.
 
 Deferred
tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion or all of the deferred
tax asset will not be realized. Deferred tax assets and liabilities are adjusted
for the effect of changes in tax laws and rates on the date of
enactment.
 
 Fair Value of Financial
Instruments- The carrying amounts reported in the balance sheet for cash,
accounts receivable and payable approximate fair value based on the short-term
maturity of these instruments.
 
 Accounts Receivable-
Accounts deemed uncollectible are written off in the year they become
uncollectible. As of September 30, 2009, the balance in Accounts Receivable was
$0.
 
 F-5
 DRC
      VENTURES, INC.
                        NOTES
      TO THE UNAUDITED FINANCIAL STATEMENTS
                        AS
      OF SEPTEMBER 30, 2009
 NOTE A- SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 
 Impairment of Long-Lived
Assets- The Company evaluates the recoverability of its fixed assets and
other assets in accordance with Statement of Financial Accounting Standards
(SFAS) No. 144, “Accounting
for the Impairment or Disposal of Long-Lived Assets”. SFAS 144 requires
recognition of impairment of long-lived assets in the event the net book value
of such assets exceeds its expected cash flows. If so, it is considered to be
impaired and is written down to fair value, which is determined based on either
discounted future cash flows or appraised values. The Company adopted the
statement on inception. No impairments of these types of assets were recognized
during the period ended September 30, 2009.
 
 Stock-Based
Compensation- The Company accounts for stock-based compensation using the
fair value method of Statement of Financial Accounting Standards (SFAS) No.
123R. This statement requires a public entity to measure the cost of employee
services received in exchange for an award of equity instruments based on the
grant-date fair value of the award (with limited exceptions). That cost will be
recognized over the period during which an employee is required to provide
service in exchange for the award- the requisite service period (usually the
vesting period). No compensation cost is recognized for equity instruments for
which employees do not render the requisite service.
 
 Fair Value for Financial
Assets and Financial Liabilities- The Company has adopted Statement of
Financial Accounting Standards (SFAS) No. 159, “The Fair Value for Financial Assets
and Financial Liabilities- Including an Amendment of FASB Statement No.
115”. This statement permits entities to choose to measure many financial
instruments and certain other items at value. The objective is to improve
financial reporting by providing entities with the opportunity to mitigate
volatility in reporting earnings caused by measuring related assets and
liabilities differently without having to apply complex hedge accounting
provisions. This is expected to expand the use of fair value measurement, which
is consistent with the Board’s long-term measurement objectives for accounting
for financial instruments. No such assets or liabilities were recognized during
the period ending September 30, 2009.
 
 Recent
Accounting Pronouncements-In December
2007, the Financial Accounting Standards Board (the “FASB”) Accounting
Codification Statement (“ASC”) 805-10 (formerly SFAS 141R), “Business
Combinations” (“ASC 805-10”) was issued. ASC 805-10 replaces prior guidance on
the subject and requires the acquirer of a business to recognize and measure the
identifiable assets acquired, the liabilities assumed, and any non-controlling
interest in the acquiree at fair value. Additionally, it also requires
transaction costs related to the business combination to be expensed as
incurred. ASC 805-10 applies prospectively to business combinations for which
the acquisition date is on or after the beginning of the first annual reporting
period beginning on or after December 15, 2008. The effective date, as well as
our adoption date, for the pronouncement was January 1, 2009. The adoption did
not have a material impact on our financial statements.
 
 In April
2008 the FASB issued ASC 350-30 (formerly FSP No. 142-3), Determination of the
Useful Life of Intangible Assets, which amends the factors that should be
considered in developing renewal or extension assumptions used to determine the
useful life of a recognized intangible asset under ASC 350-10 (formerly SFAS
142). This pronouncement requires enhanced disclosures concerning a company’s
treatment of costs incurred to renew or extend the term of a recognized
intangible asset. It is effective for financial statements issued for fiscal
years beginning after December 15, 2008. We determined that the standard will
not have a material impact on our financial statements.
 
 In May
2009, the FASB issued ASC 855-10 (formerly SFAS No. 165), “Subsequent Events,”
which establishes general standards for accounting for accounting for and
disclosure of events that occur after the balance sheet date but before the
financial statements are issued or are available to be issued. The pronouncement
requires the disclosure of the date through which an entity has evaluated
subsequent events and the basis for that date, whether that date represents the
date the financial statements were issued or were available to be issued. It is
effective with interim and annual financial periods ending after June 15, 2009.
We adopted ASC 855-10 at the beginning of our 2009 third quarter. The adoption
did not have a significant impact on the subsequent events that we report,
either through recognition or disclosure, in our financial
statement
  F-6
 DRC
      VENTURES, INC.
                        NOTES
      TO THE UNAUDITED FINANCIAL STATEMENTS
                        AS
      OF SEPTEMBER 30, 2009
 NOTE A- SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 
 Recent Accounting
Pronouncements (continued)
 
 In June
2009, the FASB issued ASC 105-10 (formerly SFAS 168), “The FASB Accounting
Standards Codification and the Hierarchy of Generally Accepted Accounting
Principles”. ASC 105-10 will become the source of authoritative U.S. GAAP
recognized by the FASB to be applied by nongovernment entities. It also modifies
the GAAP hierarchy to include only two levels of GAAP; authoritative and
nonauthoritative. ASC 105-10 is effective for financial statements issued for
interim and annual periods ending after September 15,
2009.  Therefore, the Company adopted ASC 105-10 for the reporting in
our 2009 third quarter. The adoption did not have a significant impact on the
reporting of our financial position, results of operations or cash
flows.
 
 In April
2009, the FASB issued FSP FAS No. 115-2 and FAS No. 124-2, “Recognition and
Presentation of Other-Than-Temporary Impairments ". The objective of an
other-than-temporary impairment analysis under existing U.S. generally accepted
accounting principles (GAAP) is to determine whether the holder of an investment
in a debt or equity security for which changes in fair value are not regularly
recognized in earnings (such as securities classified as held-to-maturity or
available-for-sale) should recognize a loss in earnings when the investment is
impaired. An investment is impaired if the fair value of the investment is less
than its amortized cost basis. FSP FAS No. 115-2 and FAS No. 124-2 is effective
for interim and annual reporting periods ending after June 15, 2009, with early
adoption permitted for periods ending after March 15, 2009. Earlier adoption for
periods ending before March 15, 2009, is not permitted.  The
implementation of FSP FAS No. 115-2 and FAS No. 124-2 did not have a material
impact on the Company’s financial position and results of
operations.
 
 In April
2009, the FASB issued FSP FAS No. 107-1 and APB No. 28-1, “Interim Disclosures
about Fair Value of Financial Instruments". This FSP amends SFAS No. 107, Disclosures about Fair Value of
Financial Instruments,to require disclosures about fair value of
financialinstruments for interim
reporting periods of publicly traded companies as well as in annualfinancial statements.
This FSP also amends APB Opinion No. 28, Interim Financial Reporting,to require those disclosures in summarized financial information at
interim reporting periods. FSP FAS No. 107-1 is effective for interim reporting
periods ending after June 15, 2009, with early adoption permitted for periods
ending after March 15, 2009.  The implementation of FSP FAS No. 107-1
did not have a material impact on the Company’s financial position and results
of operations
 
 In April
2009, the FASB issued FASB Staff Position “FSP” No. SFAS 107-1 and APB 28-1,
“Interim Disclosures about Fair Value of Financial Instruments”.  This
FSP amends SFAS No. 107 to require disclosures about fair values of financial
instruments for interim reporting periods as well as in annual financial
statements.  The FSP also amends Accounting Principles Board Opinions
“APB Opinion” No. 28 to require those disclosures in summarized financial
information at interim reporting periods.  This FSP becomes effective
for interim reporting periods ending after June 15, 2009, with early adoption
permitted for periods ending after March 15, 2009.  The adoption of
this FSP is not expected to have a material impact on our financial
statements.
 
 Recent Accounting
Pronouncements (continued)
 
 In April
2009, the FASB issued FSP FAS No. 157-4, “Determining Fair Value When the Volume
and Level of Activity for the Asset or Liability Have Significantly Decreased
and Identifying Transactions That Are Not Orderly". This FSP provides additional
guidance for estimating fair value in accordance with FASB Statement No. 157,
Fair Value Measurements, when the volume and level of activity for the asset or
liability have significantly decreased. This FSP also includes guidance on
identifying circumstances that indicate a transaction is not orderly. FSP FAS
No. 157-4 is effective for interim and annual reporting periods ending after
June 15, 2009, and shall be applied prospectively.  The implementation
of FSP FAS No. 157-4 did not have a material on the Company’s financial position
and results of operations.
  F-7
 DRC
      VENTURES, INC.
                        NOTES
      TO THE UNAUDITED FINANCIAL STATEMENTS
                        AS
      OF SEPTEMBER 30, 2009
 NOTE A- SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 
 
 In May
2009, the FASB issued SFAS No. 165, “Subsequent Events” (“SFAS No. 165”).
This Statement establishes general standards of accounting for and disclosures
of events that occur after the balance sheet date but before financial
statements are issued or are available to be issued.  It requires the
disclosure of the date through which an entity has evaluated subsequent events
and the basis for that date and is effective for interim and annual periods
ending after June 15, 2009.  The adoption of SFAS No. 165 is not
expected to have a material impact on the Company’s financial
statements.
 
 In June
2009, the Financial Accounting Standards Board issued Statement “FASB” issued
Statement No. 168, “The FASB Accounting Standards Codification and the Hierarchy
of Generally Accepted Accounting Principles” (“SFAS No. 168”).  SFAS
No. 168 will become the single source of authoritative nongovernmental U.S.
generally accepted accounting principles (“GAAP”), superseding existing FASB,
American Institute of Certified Public Accountants (“AICPA”), Emerging Issues
Task Force (“EITF”), and related accounting literature.  SFAS No. 168
reorganizes the thousands of GAAP pronouncements into roughly 90 accounting
topics and displays them using a consistent structure.  Also included
is relevant Securities and Exchange Commission guidance organized using the same
topical structure in separate sections.  SFAS No. 168 will be
effective for financial statements issued for reporting periods that end after
September 15, 2009.  This statement will have an impact on the
Company’s financial statements since all future references to authoritative
accounting literature will be references in accordance with SFAS No.
168.
 
 In June
2009, the FASB issued FSP Emerging Issues Task Force ("EITF") Issue No. 09-1,
“Accounting for Own-Share Lending Arrangements in Contemplation of Convertible
Debt Issuance or Other Financing”. This Issue is effective for fiscal years
beginning on or after December 15, 2009, and interim periods within those fiscal
years for arrangements outstanding as of the beginning of those fiscal years.
Share lending arrangements that have been terminated as a result of counterparty
default prior to the effective date of this Issue but for which the entity has
not reached a final settlement as of the effective date are within the scope of
this Issue. This Issue requires retrospective application for all arrangements
outstanding as of the beginning of fiscal years beginning on or after December
15, 2009. This Issue is effective for arrangements entered into on or after the
beginning of the first reporting period that begins on or after June 15, 2009.
Early adoption is not permitted. The Company is currently assessing the impact
of FSP EITF 09-1 on its financial position and results of
operations.
 
 NOTE B-SUPPLEMENTAL CASH
FLOW INFORMATION
 
 Supplemental
disclosures of cash flow information for the quarter ended September 30, 2009
and 2008 is summarized as follows:
 
 Cash paid
during the quarter ended September 30, 2009 and 2008 for interest and income
taxes:
 
 2009
                  
                  
                  2008Interest
                  
                  $
                  -
                  
                  
                  $
                  -Taxes
                  
                  $
                  -
                  
                  
                  $
                  -
  F-8
  DRC
      VENTURES, INC.
                        NOTES
      TO THE UNAUDITED FINANCIAL STATEMENTS
                        AS
      OF SEPTEMBER 30, 2009
 NOTE C-SEGMENT
REPORTING
 
 In June,
1997, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards (SFAS) No. 131,”Disclosures About Segments of an
Enterprises and Related Information”. This Statement requires companies
to report information about operating segments in interim and annual financial
statements. It also requires segment disclosures about products and services,
geographic areas, and major customers. The Company determined that it did not
have any separately reportable operating segments as of September 30,
2009.
 
 NOTE D-INCOME
TAXES
 
 Due to
the operating loss and the inability to recognize an income tax benefit there is
no provision for current or deferred federal or state income taxes for year
ended June 30, 2009
 
 Deferred
income taxes reflect the net tax effects of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and
the amount used for federal and state income tax purposes.
 
 The
Company’s total deferred tax asset, calculated using federal and state effective
tax rates, as of June 30, 2009 is as follows:
  Total
      Deferred Tax Asset
                  
                  $
                  4,405Valuation
      Allowance
                  
                  
                  (4,405
                  )Net
      Deferred Tax Asset
                  
                  
                  -
 
 The
reconciliation of income taxes computed at the federal statutory income tax rate
to total income taxes for the tax years ended June 30, 2009 and 2008 is as
follows:
  2009
                  
                  
                  2008Income
      tax computed at the federal statutory rate
                  
                  
                  34
                  %
                  
                  
                  34
                  %State
      income tax, net of federal tax benefit
                  
                  
                  0
                  %
                  
                  
                  0
                  %Total
                  
                  
                  34
                  %
                  
                  
                  34
                  %Valuation
      allowance
                  
                  
                  -34
                  %
                  
                  
                  -34
                  %Total
      deferred tax asset
                  
                  
                  0
                  %
                  
                  
                  0
                  %
 
 Because
of the Company’s lack of earnings history, the deferred tax asset has been fully
offset by a valuation allowance. The valuation allowance increased (decreased)
by approximately $1,279 and $3,126 for the years ending June 30, 2009 and 2008,
respectively.
 
 As of
June 30, 2008, the Company had a federal and state net operating loss carry
forward in the amount of approximately $ 12,958 which expires in the year ending
June 30, 2029.
 
 NOTE E-GOING
CONCERN
 
 The
accompanying financial statements have been prepared on a going concern basis,
which assumes the Company will realize its assets and discharge its liabilities
in the normal course of business.  As reflected in the accompanying
financial statements, the Company has a deficit accumulated during the
development stage of $13,197, used cash from operations of $11,927 since its
inception, and has a negative working capital of $13,197 at September 30,
2009.
 
 The
Company’s ability to continue as a going concern is dependent upon its ability
to generate future profitable operations and/or to obtain the necessary
financing to meet its obligations and repay its liabilities
  F-9
 DRC
      VENTURES, INC.
                        NOTES
      TO THE UNAUDITED FINANCIAL STATEMENTS
                        AS
      OF SEPTEMBER 30, 2009
 NOTE E-GOING CONCERN
(CONT'D)
 
 arising
from normal business operations when they come due.  The Company’s
ability to continue as a going concern is also dependent on its ability to find
a suitable target company and enter into a possible reverse merger with such
company.  Management’s plan includes obtaining additional funds by
equity financing through a reverse merger transaction and/or related party
advances; however there is no assurance of additional funding being
available.  These circumstances raise substantial doubt about the
Company’s ability to continue as a going concern. The accompanying financial
statements do not include any adjustments that might arise as a result of this
uncertainty.
 
 NOTE
F-COMMITMENTS
 
 As of
September 30, 2009, the Company had no commitments.
 
 NOTE G-CAPITAL
STOCK
 
 The
Company is authorized to issue 100,000,000 common shares at $0.0001 par value
per share.
 During
the quarter ended September 30, 2009, the company issued no stock.
 
 As of
September 30, 2009, the company had the following common shares
outstanding:
 Name
                  
                  Number of shares
                  
                  Cash or Services
                  
                  Price per share
                  
                  
                  Total valueDavid
      Powell
                  
                  
                  500,000
                  
                  founder
      shares
                  
                  $
                  0.0001
                  
                  
                  $
                  50Ronald
      Williams
                  
                  
                  500,000
                  
                  founder
      shares
                  
                  $
                  0.0001
                  
                  
                  $
                  501,000,000
                  
                  
                  
                  
                  
                  
                  
                  $
                  100
 
 The
Company is authorized to issue 10,000,000 preferred shares at $0.0001 per
share.
 
 During
the quarter ended September 30, 2009, the company issued no preferred
stock.  As of September 30, 2009, the company had no preferred shares
outstanding.
 
 NOTE H-DEVELOPMENT STAGE
COMPANY
 
 The
Company is in the development stage as of September 30, 2009 and to date has had
no significant operations. Recovery of the Company assets is dependent on future
events, the outcome of which is indeterminable. In addition, successful
completion of the Company’s development program and its transition, ultimately,
to attaining profitable operations is dependent upon obtaining adequate
financing to fulfill its development activities and achieving a level of sales
adequate to support the Company’s cost structure.
 
 NOTE I—SHAREHOLDER
LOAN/RELATED PARTY
 
 The
Company has signed a series of promissory notes with a related
party.  The total amount of loan outstanding is $12,435 and it is
payable upon demand, the annual interest rate on this note is
8%.  Accrued interest, but not paid as of September 30, 2009 and 2008
is $1,270 and $1,043, respectively.
 F-10
  Item
2. Management’s Discussion and Analysis of Financial Condition and Results of
Operations
 
 Overview.
 
 DRC
Ventures, Inc. (“we”, “us” or the “Company”) was organized in the State of
Nevada on April 15, 2008.  We are a developmental stage company and
have not generated any revenues to date.  We were organized to serve
as a vehicle for a business combination through a capital stock exchange,
merger, reverse acquisition, asset acquisition or other similar business
combination (a “Business Combination”) with an operating or development stage
business (the “Target Business”) which desires to utilize our status as a
reporting company under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”).   We are currently in the process of evaluating
and identifying targets for a Business Combination.  We are not
presently engaged in, and will not engage in, any substantive commercial
business operations unless and until we consummate a Business
Combination.
 
 Our
management has broad discretion with respect to identifying and selecting a
prospective Target Business.  We have not established any specific
attributes or criteria (financial or otherwise) for prospective Target
Businesses.  Our sole officer and director has never served as an
officer or director of a development stage public company with the business
purpose of acquiring a Target Business.  Accordingly, he may not
successfully identify a Target Business or conclude a Business
Combination.   To the extent we affect a Business Combination
with a financially unstable company or an entity in its early stage of
development or growth, including entities without established records of sales
or earnings, we may be affected by numerous risks inherent in the business and
operations of financially unstable and early stage or potential emerging growth
companies.  If we consummate a Business Combination with a foreign
entity, we will be subject to all of the risks attendant to foreign
operations.  Although our management will endeavor to evaluate the
risks inherent in a particular Target Business, we cannot assure you that we
will properly ascertain or assess all significant risk factors.
 
 We expect
that in connection with any Business Combination, we will issue a significant
number of shares of our common stock (equal to at least 80% of the total number
of shares outstanding after giving effect to the transaction and likely a
significantly higher percentage) in order to ensure that the Business
Combination qualifies as a “tax free” transaction under federal tax
laws.  The issuance of additional shares of our capital stock
will:
  ·
              significantly
      reduce the equity interest of our stockholders;
  and
 
 ·
              cause
      a change in and likely result in the resignation or removal of our present
      officers and directors.
 
 Our
management anticipates that our Company likely will affect only one Business
Combination, due primarily to our financial resources and the dilution of
interest for present and prospective stockholders, which is likely to occur as a
result of our management's plan to offer a controlling interest to a Target
Business in order to achieve a tax-free reorganization.  This lack of
diversification should be considered a substantial risk in investing in us
because it will not permit us to offset potential losses from one venture
against potential gains from another.
 
 Liquidity and Capital
Resources.
 
 At
September 30, 2009, we had cash on hand of $508.  We do not expect
that the funds available will be sufficient to cover our operating costs and
expenses.  During the next twelve months we anticipate that we will
incur costs and expenses in connection with the preparation and filing of
reports under the Securities Exchange Act and the evaluation and investigation
of targets for a Business Combination.  Management expects to fund
additional costs and expenses which may be incurred in connection with due
diligence activities and a Business Combination through loans or further
investment in the Company, as and when necessary.  We cannot provide
investors with any assurance that we will have sufficient capital resources to
identify a suitable Target Business, to conduct effective due diligence as to
any Target Business or to consummate a Business Combination.  As a
result of our negative working capital, our losses since inception, and failure
to generate revenues from operations, our financial statements include a note in
which our auditor has expressed doubt about our ability to continue as a "going
concern."
  3
  Results of
Operations.
 
 Since our
inception, we have not generated any revenues.  We reported a net loss
for the period ended September 30, 2009 of $239 and a net loss since inception
of $13,197.
 
 We do not
expect to engage in any substantive activities unless and until such time as we
enter into a Business Combination with a Target Business, if ever.  We
cannot provide investors with any assessment as to the nature of a Target
Business’s operations or speculate as to the status of its products or
operations, whether at the time of the Business Combination it will be
generating revenues or its future prospects.
 
 Item
3. Quantitative and Qualitative Disclosures About Market Risk.
 
 Not
applicable.
 
 Item
4(T). Controls and Procedures.
 
 Evaluation
of Disclosure Controls and Procedures
 
 As of
September 30, 2009, the Company’s management carried out an evaluation, under
the supervision and with the participation of the Company’s Chief Executive
Officer, who is the Company’s principal executive officer and principal
financial officer, of the effectiveness of the design and operation of the
Company’s disclosure controls and procedures (as defined in Rules 13a-15 and
15d-15 under the Exchange Act), pursuant to Exchange Act Rule 13a-15. Based on
such evaluation, the Company’s Chief Executive Officer has concluded that the
Company's disclosure controls and procedures were effective.
  Changes
in Internal Controls
 
 There
have been no changes in the Company’s internal control over financial reporting
(as defined in Rules 13a-15 and 15d-15 under the Exchange Act) during the three
months ended September 30, 2009 that have materially affected, or are reasonably
likely to materially affect, the Company’s internal control over financial
reporting.
 
 
 PART
II — OTHER INFORMATION
 
 Item
1. Legal Proceedings.
 
 The
Company is not a party to any legal proceeding or litigation.
 
 Item
1A. Risk Factors.
  4
  Smaller
reporting companies are not required to provide the information required by this
item.
 
 Item
2. Unregistered Sales of Equity Securities and Use of Proceeds.
 
 (a) During
the three months ended September 30, 2009, the Company did not issue any
securities.
 
 (b) Not
applicable.
 
 (c)
During the three months ended September 30, 2009, neither the issuer nor any
"affiliated purchaser," as defined in Rule 10b-18(a)(13), purchased any shares
or other units of any class of the issuer's equity securities.
 
 Item
3. Defaults Upon Senior Securities.
 
 None.
 
 Item
4. Submission of Matters to a Vote of Security Holders.
 
 None.
 
 Item
5. Other Information.
 
 None.
 
 Item
6. Exhibits.
 
 Exhibit
              Description31.1
              Certification
      of the Company’s Principal Executive Officer and Principal Financial
      Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with
      respect to the registrant’s Quarterly Report on Form 10-Q for the quarter
      ended September 30, 2009.32.1*
              Certification
      of the Company’s Principal Executive Officer and Principal Financial
      Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
      906 of the Sarbanes Oxley Act of
2002.
 
 *Pursuant to Commission Release
No. 33-8238, this certification will be treated as “accompanying” this
Quarterly Report on Form 10-Q and not “filed” as part of such report for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended,
or otherwise subject to the liability of Section 18 of the Securities
Exchange Act of 1934, as amended, and this certification will not be deemed to
be incorporated by reference into any filing under the Securities Act of 1933,
as amended, or the Securities Exchange Act of 1934, as amended, except to the
extent that the registrant specifically incorporates it by
reference.
  5
  SIGNATURES
 
 Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
Registrant has duly caused the Report to be signed on its behalf by the
undersigned thereunto duly authorized.
 
 
 DRC
      VENTURES, INC.Dated:
      November 12, 2009
              By:
              /s/ Ronald
      WilliamsName:
              Ronald
      WilliamsTitle:
              President,
      Principal Executive Officer
                and
      Principal Financial Officer
  6